7. Car Loan Interest Is Now Deductible
A rare personal-use interest deduction
If you bought a new vehicle assembled in the U.S. and financed it, part of the loan interest may be deductible—up to $10,000 per year.
Pros
- Lowers the true cost of car ownership
- Encourages U.S. manufacturing
Cons
- Only applies to new, U.S.-assembled vehicles
- Income limits reduce or eliminate the benefit
- Lenders may not provide forms immediately
Finally! A Tax Break on New Car Loan Interest (2026)
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